Jennifer Tescher

Financial education programs have been shown to be largely ineffective. What low-income consumers really need from banks are better products and more tailored advice.

The agency’s recent bulletin could help banks get back into the small-dollar lending business, keeping needy borrowers out of debt traps. But other regulatory limits remain in focus.

Big banks increasingly are developing application programming interfaces to make their customers’ data available to third parties. But discrete deals between banks and third parties would be a bad outcome for consumers and the industry as a whole.

Cards preloaded with unemployment insurance, child support, food stamps and other government benefits can be viewed as potential bank accounts, waiting to be opened by people with the fewest quality opportunities to connect to the financial mainstream.

Also, it's OK just to make transactions easier and cheaper, even if consumers don't "graduate" to a bank account. And eight other lessons from the premier conference in this space.

It's about time banks stop whining about increased regulation and do something to get ahead of it.

I naively thought that Suze Orman's new prepaid offering, the Approved Card, would help turn the tide of negativity. Instead, it has had the opposite effect, creating a seemingly endless echo chamber about the evils of prepaid.

A few weeks ago, I wrote a column describing the financial preferences and behaviors of underserved consumers by painting a picture of an archetypal consumer named Sue. Taking stock of the true needs of the underserved helps explain why traditional bank products and practices often miss the mark.

In all the talk about new checking account fees and their impact on the financially underserved, there has been little focus on actual consumers. It is worth reminding ourselves who "they" are.

August 2008 Issue

Millions of unbanked and underbanked consumers have at best a tenuous connection to a depository. Without access to debit and credit cards, they are stuck in the cash economy, unable to participate in the opportunities electronic payments present. Likewise, financial institutions wedded to the traditional checking account as an organizing principle have been unable to make profitable inroads into what has become a very large consumer demographic.